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Skills of the trade: valuing health risk reductions in benefit-cost analysis

Published online by Cambridge University Press:  19 January 2015

Lisa A. Robinson  and
James K. Hammitt
Lisa A. Robinson*
Affiliation:
Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School, USA
James K. Hammitt
Affiliation:
Harvard University (Center for Risk Analysis), USA and Toulouse School of Economics (LERNA-INRA), France
*
Lisa A. Robinson, Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School, USA, lisa.a.robinson@comcast.net
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Abstract

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Many public policies and private actions affect the risk of injury, illness, or death, yet changes in these risks are not easily valued using market prices. We discuss how to value these risk reductions in the context of benefit-cost analysis. We begin with a pragmatic focus, describing the analytic framework and the approaches currently used for valuation, including estimates of willingness to pay, cost of illness, and monetized quality-adjusted life years. We then turn to some conceptual issues that illustrate areas in need of further exploration.

Keywords

benefit-cost analysiscost of illnesshealth risk valuationvalue per statistical lifewillingness to payquality-adjusted life year
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 4 , Issue 1 , 28 March 2013 , pp. 107 - 130
Copyright
Copyright © Society for Benefit-Cost Analysis 2013

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